One can become wealthy with a high-paying job if disciplined enough to save a large portion of their income. However, the data shows having multiple income streams does more than just bring home more money.

Helps cash-flow emergencies

Imagine having an accident or your basement flooded. These are big expenses most people would pull money from emergency reserves to cover or rely on credit cards.

Now imagine you have a full-time job and a side-hustle (secondary stream of income). While the side-hustle might not produce the same amount of income as a day job, it does allow for more margin in your budget.

Suddenly, there is more cash available to cover an emergency expense without dipping into savings or borrowing on a credit card.

A secondary or tertiary stream of income can also be used to save for future purchase instead of taking out loans (think new vehicle or replacing the roof on a house).

Reduces household expenses by deducting on income taxes

Christine Oodle from Coach Connections says she gets to write off many of her expenses that used to come out of their personal budget.

Cell phone

Vehicle (one of them)

Portion of her home

Listen to Andy Magnus talk about what types of expenses are deductible in this interview segment [27:58]

Increases confidence to take greater risk (and reap greater rewards)

The financial decisions we make are largely decided by our ability to recover if it all goes downhill.

We take more risk when we feel we have less to lose. The same goes for those who have margin in their budget.

Think of it this way: If all your bills were paid and there were ten $100 bills in your pocket, you would be more likely to buy into riskier investments than if you were living paycheck-to-paycheck with no savings in the bank.

You might be handy with a hammer and saw. You might be crafty and create interesting pieces of art to sell on Etsy.com. Or consider your neighbors might pay $10-$20 to have their driveways shoveled before they need to leave for work or their dogs walked when they are away.